DEPOSITARY RECEIPT MARKET AND STOCK MARKET DEVELOPMENT RELATIONSHIP IN CENTRAL AND EASTERN EUROPE EMERGING COUNTRIES

Abstract

During the last two decades the growing importance of financial markets has been observed. Moreover, a link between financial markets in the world has become conspicuous. Financial markets have become global markets. This means that transactions involve entities operating internationally. One of the symptoms of companies international operations, among other things, is issuing depositary receipts in foreign financial markets.

The aim of this study is to analyse relationship of the DR market development and the stock market development in Central and Eastern Europe (CEE) emerging countries. The main research hypothesis is the statement: DR market development in CEE emerging countries is correlated with stock market development in these countries.

Research on DR market development and stock market development in emerging countries has been carried out to achieve the aim of the study. The article presents a statistical analysis of depositary receipts and stock markets in the period of 1995-2009. A regression test and Pearson’s correlation test were used in the research.

Research results indicate that the DR market development is highly correlated with the development of the stock market in emerging CEE countries.

DOI: http://dx.doi.org/10.5755/j01.em.18.4.5694